January 12, 2010

If the BALDC gets a smaller slice of the arena bond fee than the ESDC, is the bond issuance some kind of organizational shell game?

Atlantic Yards Report

Did New York State give Bruce Ratner a special discount on the financing fee for the sale of arena bonds?

One telling footnote to the Atlantic Yards arena tax-exempt bond deal is that the Empire State Development Corporation (ESDC) gets a larger cut of the agency financing fee than the Brooklyn Arena Local Development Corporation (BALDC), which formally issued the bonds and is officially--if not practically--quite separate from the ESDC.

The ESDC received a fee of $1 million and the BALDC received a fee of $533,000. Some $511 million in bonds were issued.
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How do those fees compare to other bond issues? The closest comparison, though not a direct one, concerns new stadiums for the Yankees and the Mets. The New York City Industrial Development Authority (NYC IDA) charged developers of the stadiums both an agency financing fee and a state bond issuance fee.
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And while direct comparisons are impossible, it appears that Atlantic Yards developer Forest City Ratner got a better deal, since the agency financing fee for the arena bonds was a lesser percentage of the total bond issue than were the fees for the stadium bonds.